Textile industry for rebate in the proposed GST regime

The city-based textile industry has demanded rebate in the proposed GST regime, claiming the textile industry to be the second highest employment-generating sector after agriculture.

Punjab Pradesh Beopar Mandal (PPBM) president PL Seth said the local textile sector was undergoing through a slump due to the increasing investment cost, shortage of skilled labour and squeezing markets. He reasoned that the government had already exempted the sector from the taxes under the service tax on employees.

Intense global competition and an unfavourable tax regime were already throttling the industry.

For instance, the excise exemption limit for textile industry had been stagnant at Rs 1.50 crore for the past eight years. The demand to raise it to Rs 5 crore remained unmet. Similarly, the capital investment limit of the Micro Small Medium Enterprises (MSME) had been Rs 5 crore since 2006 and this needed to be increased to Rs 10 crore now.

It would give advantage of a low rate of interest on loans. Imported machinery was required to modernise the units to check the ever-changing designs of global competition. Besides, import duties must be reduced.

Weaving was the oldest industry in the holy city, as textile units here were manufacturing various kinds of fabrics, including suiting, shirting, tweed, blazer, blankets and women’s dress material.

The PPBM sought administrative control of central, state and international Goods and Service Tax from a single department to save industrialists and businessmen from hassles of dealing with multiple departments. It also sought constitution of GST councils in each state and due representation to the local business fraternity to provide voice to their concerns and demands arising in due course of its implementation.

It added that already an unequal tax regime across northern states, dearth of new markets, lack of R&D (research and development), absence of support from the State government were causing hindrances in the growth of the textile industry in the holy city.

It said loans at easy and a low rate of interest must be offered to manufacturers and the government must support export of shawls.

It cited the instance of vanishing of processing units of the textile industry from this border city. It stated that highly labour-intensive processing units offering employment to thousands here were shut down one by one, but neither the government nor its agencies ever attempted to prevent its downward slide.

It reasoned that causes of its disappearance were imposition of multiple taxes, costly raw material, an unsupportive attitude of the government, failure on the part of its operators to modernise their plants.

It announced to communicate their concerns about the proposed GST to the Union Government.